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The Role of Financial Flexibility on Enterprise Sustainable Development during the COVID-19 Crisis—A Consideration of Tangible Assets

Sustainability, 2021-02, Vol.13 (3), p.1245 [Peer Reviewed Journal]

2021. This work is licensed under http://creativecommons.org/licenses/by/3.0/ (the “License”). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;2021 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;ISSN: 2071-1050 ;EISSN: 2071-1050 ;DOI: 10.3390/su13031245

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  • Title:
    The Role of Financial Flexibility on Enterprise Sustainable Development during the COVID-19 Crisis—A Consideration of Tangible Assets
  • Author: Teng, Xiaodong ; Chang, Bao-Guang ; Wu, Kun-Shan
  • Subjects: Coronaviruses ; Corporate debt ; Costs ; COVID-19 ; Economic conditions ; Economic development ; Flexibility ; GDP ; Gross Domestic Product ; Growth rate ; Hypotheses ; Investments ; Liquidity ; Manufacturing ; Manufacturing industry ; Pandemics ; Return on assets ; Risk management ; Stock exchanges ; Sustainability ; Sustainable development
  • Is Part Of: Sustainability, 2021-02, Vol.13 (3), p.1245
  • Description: Financial flexibility refers to the ability of a firm to respond effectively to unanticipated shocks to its cash flows or its investment opportunities and is a key factor in the sustainable development of enterprise. This article explores the effect of financial flexibility on the enterprise performance of Taiwan’s manufacturing industry during the COVID-19 pandemic. Data for the first and second quarter of 2020 from companies listed on the Taiwan Stock Exchange were collected and analyzed. The results indicate that for listed manufacturing companies on the Taiwan Stock Exchange, financial flexibility has a significant and positive effect on enterprise performance (return on assets, ROA), particularly in the asset-heavy manufacturing industry. However, financial flexibility has no significant effect on the enterprise performance of the asset-light manufacturing industry or the semiconductor industry. This study also show evidence that Taiwan’s asset-light manufacturing industry suffered the most from the COVID-19 crisis, which is not conducive to its sustainable development. In summary, the results show that Taiwan’s manufacturing industry has poor financial flexibility and one of the worst ROA during the COVID-19 pandemic. Based on the results of this research, effective suggestions to rationally retain financial flexibility and pay more attention to liquidity risk management for sustainable development are proposed for Taiwan’s manufacturing industry.
  • Publisher: Basel: MDPI AG
  • Language: English
  • Identifier: ISSN: 2071-1050
    EISSN: 2071-1050
    DOI: 10.3390/su13031245
  • Source: Geneva Foundation Free Medical Journals at publisher websites
    Coronavirus Research Database
    ROAD: Directory of Open Access Scholarly Resources
    ProQuest Central
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